VECO Intern., Inc. v. Alaska Public Offices Com'n
| Decision Date | 01 April 1988 |
| Docket Number | No. S-1598,S-1598 |
| Citation | 753 P.2d 703 |
| Parties | VECO INTERNATIONAL, INC., and its Subsidiaries, Appellants, v. The ALASKA PUBLIC OFFICES COMMISSION, Appellee. |
| Court | Alaska Supreme Court |
Sema E. Lederman, Clifford J. Groh, Lance E. Gidcumb, Groh, Eggers & Price, Anchorage, for appellants.
Richard D. Monkman, Asst. Atty. Gen., Juneau, Grace Berg Schaible, Atty. Gen., Juneau, for appellee.
Before RABINOWITZ, C.J., and BURKE, MATTHEWS, COMPTON and MOORE, JJ.
Under the Alaska Campaign Disclosure Act, every group as defined in AS 15.13.130(4) 1 must register with the Alaska Public Offices Commission 2 before making a contribution to a candidate, and must file periodic reports concerning, among other things, its contributions. 3 The Alaska Public Offices Commission found that appellants VECO International, VECO, Inc., and Norcon, Inc. 4 had formed groups with their respective employees which had made contributions to candidates and had not complied with the reporting requirements of AS 15.13.040. The Commission imposed a civil penalty under AS 15.13.125 of $72,600. 5 VECO appealed the decision of the Commission to the superior court, which affirmed the Commission. VECO now appeals to this court.
VECO raised money and made contributions in the following way. It encouraged its employees to authorize $100 to be withheld from their paychecks. The money would be paid to a candidate chosen by the Alaska Political Action Committee which was controlled by Bill Allen, chairman of VECO, and a colleague. Each of the VECO corporations was a member of the Political Action Committee. Each employee had the right to select a donee other than candidates chosen by the Committee within fifteen days after receiving notice of the Committee's choice. 6
By mid-December of 1983, VECO had accumulated $41,080 from employee payroll deductions. VECO informed its contributing employees that the candidates recommended by the Political Action Committee were Senators Bennett, Eliason, Faiks, Fischer, and Moss. Each employee received a notice from VECO stating, in part:
Unless you notify APAC c/o Bob Ely, VECO International ... that you do not wish to contribute to one or more of the above Alaska State Senators, your contribution and those of the other employees who have contributed will be allocated to one or more of the above supporters of a reasonable tax policy for the State of Alaska.
Of the 415 employees who had consented to the payroll deduction, one instructed VECO that his contributions should go to only one of the five recommended candidates, three others withdrew from the plan entirely, and two directed VECO to disburse no part of their contributions to one of the recommended candidates. It appears the others did not respond to the notice. Thereafter, the money was divided up in five nearly equal shares of approximately $7,700 and one share was distributed to each of the five candidates in a series of $100 checks.
Ten points on appeal are presented:
1. The superior court erred in giving retroactive effect to the Commission's regulations.
2. VECO did not form a group with its employees as defined by AS 15.13.130(4). 7
3. The Commission is estopped from finding that the VECO withholding plan constituted group activity.
4. The Alaska Campaign Disclosure Act is unconstitutionally overbroad.
5. The Act is unconstitutionally vague.
6. The Act violates the right to privacy.
7. The Commission abused its discretion in failing to give VECO notice of delinquency.
8. The Commission erred in failing to make findings or state reasons regarding the penalties it assessed.
9. The penalties assessed are excessive.
10. The accrual of penalties during appeal is unconstitutional.
We hold that a partial estoppel should apply and that a statement of reasons regarding penalties should have been given. We also hold that the accrual of penalties during the administrative appeal was improper. The other points are rejected.
VECO makes two contentions concerning this point. First, it complains that the superior court relied on a regulation, 2 AAC 50.314(a)(1) (eff. 1/4/86), 8 defining the word "group," which was not in effect until after the case was decided by the Commission. VECO argues that this amounts to an unconstitutional ex post facto law application. Second, VECO argues that the post decision repeal of a regulation which required the reporting of any informal gathering of twenty-five or more people in a private home, 2 AAC 50.325(f)(4) (repealed 1/4/86), should not have been considered by the superior court to moot VECO's argument that the Act violates the right to privacy.
These arguments reflect a misunderstanding of the standard of review which we employ in reviewing administrative appeals. "On appeal from an administrative appeal to the superior court we review the merits of the administrative determination directly, except to the extent that supplemental evidentiary proceedings have taken place in the superior court." Oceanview Homeowners Ass'n v. Quadrant Constr. & Eng'g, 680 P.2d 793, 798-99 (Alaska 1984); Dresser Industries, Inc./Atlas Div. v. Hiestand, 702 P.2d 244, 246 n. 3 (Alaska 1985); National Bank of Alaska v. State, Dep't of Revenue, 642 P.2d 811, 816 (Alaska 1982). What VECO must demonstrate is error on the part of the Commission, not the superior court. These arguments do not speak to Commission error and thus do not require review.
Alaska Statute 15.13.130(4) 9 provides that a group is "any combination of two or more persons ... acting jointly who take action the major purpose of which is to influence the outcome of an election...." The Commission held that each of the three VECO employer corporations constituted a separate group with their respective contributing employees. Under the Act, a corporation is a person. AS 15.13.130(7), AS 01.10.060(8). The Commission noted that "two or more persons or individuals were involved in each plan" and that "the major purpose of each payroll deduction plan was to influence the outcome of an election." The combination and purpose requirements of the statutory definition having been satisfied, the issue that remained was whether joint action existed.
The Commission found joint action because "the employers actively participated in determining which candidates would receive the pool of funds from their employees." Absent the employers' role in recipient selection, the Commission indicated that the joint action requirement would not be fulfilled:
The Alaska Public Offices Commission staff has taken the position that a withholding plan does not constitute joint action when the employee names a specific candidate, or candidates, to receive the withheld money. With this position, the Commission agrees. Under such circumstances, the employer is a mere conduit and has played no active part in the plan other than to mechanically obey the directions of its employees.
VECO argues that We agree with the Commission's position. Joint action in a payroll withholding contribution plan does not require mandatory participation by all employees, nor an absolute right of selection on the part of the employer. When two people or entities act jointly, they cooperate or collaborate. One need not control the other. In this context, joint action exists if the employer has a significant role in candidate selection.
It is clear VECO had such a role. VECO distributed authorization forms which ensured, as a practical matter, that the great bulk of the contributions would go to candidates selected by the Alaska Political Action Committee. In itself that would be sufficient employer involvement for joint action. There was, however, more, as each of the corporations was a member of the Committee, and the Committee was co-founded and controlled by Bill Allen, VECO's chairman.
In August of 1983, Bill Allen and Ed Dankworth, a VECO consultant and lobbyist, met with Theda Pittman, Executive Director of the Commission. The meeting was recorded. Allen and Dankworth said they were considering a payroll withholding plan and they wanted to know whether it would be exempt from the Act's reporting requirements. Pittman was asked whether VECO could bring a candidate to one of its oilfield camps and encourage employees to contribute to the candidate's campaign by authorizing a payroll deduction. Pittman indicated that such activity would be exempt. 10 Pittman knew that the opinions that she expressed were likely to be relied upon.
On December 16th, Robert Ely, counsel for VECO, delivered various documents to Pittman, including the authorization for payroll deduction. Pittman agreed to have them reviewed to determine whether the reporting requirements of the Act applied to the plan which the documents depicted.
Pittman, on behalf of the Commission, wrote two letters in response to this request. The first, delivered February 9, 1984, indicated that if employees specified the candidate recipient, "rather than granting APAC any discretion in that transaction," the transaction was exempt. Similarly, the second letter, dated February 16, 1984, stated:
if the recipient of the withheld funds is not specified by the employee, then a group would have been formed under AS 15.13 with the employer as the administrator/treasurer. It seems plain to me that the employer cannot first get authority only to withhold pay and later go back for permission to give the funds to particular candidates or political groups.
The general elements of estoppel are (1) the assertion of a position by conduct or word, (2...
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